Variant Alternative Income Fund (NICHX)
May 31, 2022
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For use with accredited investors only |
Income done differently |
Fund summary
The Variant Alternative Income Fund offers investors efficient access to a diversified portfolio of unconventional income-generating assets. The Fund invests in niche market opportunities with strong cash flow characteristics and low correlations to public equity and bond markets. The Fund's primary objective is to provide a high level of current income. Capital appreciation will be considered a secondary objective. Variant, an innovator in alternative income investing, is led by an investment team with decades of experience investing in market niches. Interval funds provide investors such features as daily pricing, 1099 tax reporting, and quarterly liquidity with a fund-level gate of 5-25% of NAV. The interval fund structure allows accredited investors the opportunity to access less liquid, potentially higher yielding alternative investments.
Since inception performance1
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Return2 |
Risk3 |
Sharpe4 Correl.5 Beta6 |
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Variant | NICHX |
8.93% |
1.48% |
5.28 |
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T-bills | BBG 1-3 Mo7 |
1.12% |
0.32% |
- |
-0.03 |
-0.15 |
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IG bonds | BBG Agg8 |
1.10% |
4.08% |
(0.01) |
0.17 |
0.06 |
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High yield | BBG HY9 |
3.36% |
7.99% |
0.28 |
0.24 |
0.04 |
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Hedge funds | HFRXGL10 |
2.08% |
5.12% |
0.19 |
0.17 |
0.05 |
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Equity | S&P 50011 |
12.92% |
16.99% |
0.69 |
0.05 |
0.00 |
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$1.50 |
Growth of $1,000,000 |
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$1.45 |
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Variant |
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$1.40 |
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NICHX |
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$1.35 |
High yield |
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$1.30 |
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$1.25 |
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IG bonds |
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$1.20 |
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$1.15 |
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$1.10 |
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Hedge funds |
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$1.05 |
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$1.00 |
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$0.95 |
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$0.90 |
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Sep-17Dec-17Mar-18 |
Jun-18Sep-18Dec-18Mar-19Jun-19Sep-19Dec-19Mar-20Jun-20Sep-20Dec-20Mar-21Jun-21Sep-21Dec-21Mar-22 |
Annualized return
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Fund terms 12 |
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Risk vs return |
Fund assets: |
$1,934 million |
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10% |
Fund structure: Interval closed-end fund |
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9% |
Variant |
Qualifications: |
Accredited Investor |
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8% |
NICHX |
Share class launch: |
October 1, 2018 |
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Subscriptions / NAV: |
Daily |
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7% |
Redemptions: |
Qtrly 5%-25% of NAV |
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Distributions: |
Quarterly |
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6% |
Tax reporting: |
1099 |
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5% |
Share classes: |
Institutional |
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Ticker: |
NICHX |
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4% |
Min. investment: |
$1,000,000 |
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3% |
Management fee13: |
0.95% |
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High yield |
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Gross expense ratio: |
1.78% |
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2% |
Hedge funds |
Net expense ratio14: |
1.85% |
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Administrator: |
UMB Fund Services |
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1% |
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IG bonds |
Counsel: |
Faegre Drinker |
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0% |
Auditor: |
Cohen & Company |
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0% |
1% |
2% |
3% |
4% |
5% |
6% |
7% |
8% |
9% 10% |
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Distributor: Foreside Fund Services, LLC |
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Annualized risk | standard deviation |
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Monthly returns1 |
Year to date returns1 |
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Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
YTD |
NICHX |
BBG Agg8 |
BBG HY9 |
HFRXGL10 |
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2017 |
0.12 |
0.19 |
0.42 |
0.73 |
Q417 |
0.73 |
0.39 |
0.47 |
1.50 |
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2018 |
0.63 |
0.31 |
0.11 |
0.48 |
0.62 |
0.87 |
0.84 |
0.44 |
0.47 |
0.64 |
0.87 |
0.74 |
7.26 |
2018 |
7.26 |
0.01 |
-2.08 |
-6.72 |
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2019 |
0.48 |
0.59 |
1.98 |
0.82 |
1.05 |
1.07 |
1.35 |
1.07 |
0.52 |
0.76 |
0.64 |
1.24 |
12.22 |
2019 |
12.22 |
8.72 |
14.32 |
8.62 |
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2020 |
1.17 |
0.48 |
-0.50 |
-0.27 |
0.87 |
0.34 |
0.76 |
0.08 |
0.56 |
0.72 |
0.45 |
1.06 |
5.87 |
2020 |
5.87 |
7.51 |
7.11 |
6.81 |
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2021 |
1.10 |
0.94 |
0.92 |
0.90 |
1.59 |
0.96 |
1.72 |
0.72 |
0.65 |
0.72 |
0.72 |
0.72 |
12.29 |
2021 |
12.29 |
-1.54 |
5.28 |
3.65 |
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2022 |
0.68 |
0.60 |
0.72 |
0.86 |
0.49 |
3.40 |
2022 |
3.40 |
-8.92 |
-8.00 |
-3.31 |
Past performance is not indicative of future results.
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Inception date is October 2, 2017. Returns are net total returns. Between October 2017 and September 2018, performance is quoted for the Variant Alternative Income Fund LP, the predecessor private fund that converted into the interval fund. The predecessor fund was, in all material respects, equivalent to the interval fund. The private fund track record was adjusted to reflect the interval fund's estimated expenses and expense limitations. Specifically, it reflects a management fee of 0.95% and fund expenses capped at 0.50%. The track record uses geometric returns and reflects the reinvestment of earnings. Results audited through April 30, 2021.
2 "Return" reflects the annualized net return of the fund since launch in October 2017 through the as of date listed on the table.
3 "Risk" is the annualizunaed standard deviation over the period.
4 "Sharpe" is a ratio of the "Return" minus the T-bills index (as a measure of the risk-free rate) divided by "Risk". Generally the greater the value to the Sharpe Ratio, the more attractive the risk adjusted return.
5 "Correl" depicts the correlation, or the performance relationship, between the Fund and the reference indices on a monthly basis over the period.
6 "Beta" measures the volatility of the Fund relative to the reference indices over the period.
7 "T-bills" & "BBG 1-3 Mo" refer to the Bloomberg U.S. Treasury Bills: 1-3 Months Index, which tracks the market for Treasury bills issued by the U.S. government with remaining maturities of 1 to 3 months.
8 "IG bonds" & "BBG Agg " refer to the Bloomberg U.S. Aggregate Index, which is a broad-based flagship benchmark that measures the investment-grade, U.S. dollar-denominated,fixed-rate taxable bond market.
9 "High yield" & "BBG HY" refer to the Bloomberg U.S. High Yield Index, which measures the U.S. dollar-denominated, high yield, fixed-rate corporate bond market. 10 "Hedge funds" & "HFRXGL" refer to the HFRX Global Hedge Fund Index, which is designed to be representative of the overall composition of the hedge fund universe.
11 "Equity" & "S&P 500" refer to the S&P 500® Index, which is a market-value weighted index of equity securities.
12 Please review the prospectus for a complete description of Fund terms, risks, charges and expenses.
13 "Management fee" reflects the contractual rate paid on the average daily managed assets of the Fund on an annual basis, payable monthly in arrears and determined as of month end. Use of Fund leverage will increase the actual Management fee paid to the Investment Manager.
14 The Expense Limitation and Reimbursement Agreement is in effect until October 31, 2021 and will automatically renew for consecutive one-year terms thereafter.
Please note: The referenced indices are shown for general market comparisons. Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses or transaction costs. Reference indices are provided for illustrative purposes only. There are no known published benchmarks or indices comparable to the investment strategies of the Fund.
About Variant Investments
Variant Investments, LLC, ("Variant") is an alternative investments manager based in Portland, OR. Variant was founded in 2017 and manages $1.9B in assets across two interval fund products, the Variant Alternative Income
Contact us
ir@variantinvestments.com
503.563.0700
10300 SW Greenburg Road
Suite 308
Portland, OR 97223
www.variantinvestments.com
Portfolio allocations as of May 31, 2022
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# of asset |
# of positions |
Largest position |
Commitments < |
Direct |
Leverage |
19 |
1 yr total |
3 yr total |
1 yr distribution |
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classes15 |
than 1 yr16 |
investments17 |
return1 |
return1 |
rate18 |
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11 |
68 |
6.0% |
38% |
71% |
0.00% |
9.99% |
9.51% |
5.97% |
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Asset class15 |
Asset class definitions15 |
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Litigation finance: Senior loans or advances to law |
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firms and individuals backed by the receivables |
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from litigation claims |
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Portfolio finance: Bespoke financing solutions to |
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private funds secured by a diversified portfolio of |
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fund assets |
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Real estate debt: Privately-negotiatedlimited-term |
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bridge loans secured by commercial |
properties, |
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including senior living, multi-family |
and office |
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Royalties: Financing future royalty streams in both |
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music (song and performance recordings) and |
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commodities (oil and gas). |
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Secondaries in private credit: Acquisition of pre- |
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existing investor commitments to private credit |
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funds where the underlying assets are purchased |
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at a discount to NAV |
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Specialized real estate equity: Equity opportunities |
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with strong cash flows in niche real estate sectors, |
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including self-storage and specialized care |
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facilities |
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Specialty finance: Senior credit facilities provided |
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to other lenders and originators of risk assets, |
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secured by diversified pools of their origination |
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Commitment |
16 |
Vehicle |
17 |
Trade finance: Financing the acquisition and |
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transportation of goods from buyer to end seller |
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Tradeable securities & cash: Public securities held |
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for liquidity management purposes, including |
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MLPs, BDCs and preferred stocks |
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Transportation finance: Equity and debt |
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investments in aviation, shipping, rail, containers |
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and other transportation sectors |
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Warehouse facilities: Short-term financing |
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provided to an originator pending distribution to |
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end investors |
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0-3 mo's |
3-12 mo's 12-36 mo's 36+ mo's |
- Asset classes listed are the primary areas of investment for the Fund, as described in the "Investment Objective and Strategies" section of the prospectus. Each of the Underlying Funds has its own investment risks, and those risks can affect the value of the Underlaying Funds' shares and therefore the value of the Fund's investments.
- Commitment is the length of time until a majority of invested principal is expected to be returned or be available for liquidation. In the chart, "mo's" is used as an abbreviation for months.
- Vehicle describes the legal structure of the investment. "Direct investments" are the sum of securities & cash, credit facilities and SPVs. "SPVs" refers to special purpose vehicles.
- 1 yr distribution rate sums the quarterly distribution rates over the prior four quarters. The distribution rate is the amount of a Fund's distribution divided by the Fund's prior day market price. The distribution may include a combination of ordinary dividends, capital gain and return of investor capital as it has the potential to change during any given tax year.
- Leverage reflects the amount of borrowings by the Fund as a percent of Fund AUM.
The Variant Alternative Income Fund is a continuously-offered,non-diversified, registered closed-end fund with limited liquidity. There is no guarantee the Fund will achieve its objective. An investment in the Fund should only be made by investors who understand the risks involved, who are able to withstand the loss of the entire amount invested and who can bear the risks associated with the limited liquidity of Shares. A prospective investor must meet the definition of "accredited investor" under Regulation D under the Securities Act of 1933. Important Risks: Shares are an illiquid investment. You should generally not expect to be able to sell your Shares (other than through the repurchase process), regardless of how the Fund performs. Although the Fund is required to implement a Share repurchase program only a limited number of Shares will be eligible for repurchase by the Fund. An investment in the Fund is speculative, involves substantial risks, including the risk that the entire amount invested may be lost, and should not constitute a complete investment program. The Fund may leverage its investments by borrowing, use of swap agreements, options or other derivative instruments. The Fund is
- newly-organizedclosed-end management investment company that has limited operating history and no public trading of its shares. The Fund is a non-diversified management investment company, meaning it may be more susceptible to any single economic or regulatory occurrence than a diversified investment company. In addition, the fund is subject to investment related risks of the underlying funds, general economic and market condition risk. Alternative investments provide limited liquidity and include, among other things, the risks inherent in investing in securities, futures, commodities and derivatives, using leverage and engaging in short sales. The Fund's investment performance depends, at least in part, on how its assets are allocated and reallocated among asset classes and strategies. Such allocation could result in the Fund holding asset classes or investments that perform poorly or underperform. Investments and investment transactions are subject to various counterparty risks. The counterparties to transactions in over the-counter or "inter-dealer" markets are typically subject to lesser credit evaluation and regulatory oversight compared to members of "exchange-based" markets. This may increase the risk that a counterparty will not settle a transaction because of a credit or liquidity problem, thus causing the Fund to suffer losses. The Fund and its service providers may be prone to operational and information security risks resulting from breaches in cyber security. A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information, suffer data corruption, or lose operational capacity. PANDEMIC RISK. The continuing spread of an infectious respiratory illness caused by a novel strain of coronavirus (known as COVID-19) has caused volatility, severe market dislocations and liquidity constraints in many markets, including securities the Fund holds, and may adversely affect the Fund's investments and operations. BEFORE INVESTING YOU SHOULD CAREFULLY CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. THIS AND OTHER INFORMATION IS IN THE PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED FROM (877) 770-7717 OR WWW.VARIANTINVESTMENTS.COM. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST. Foreside Fund Services, LLC, distributor. tnairavediserof
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Variant Alternative Income Fund published this content on 10 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 June 2022 09:35:11 UTC.
